Queues get longer as ATM numbers shrink

MUMBAI: With currency in circulation surging to a new high and the number of ATMs shrinking over the past two years, the average usage of ATMs is on the rise. From the low of 105 transactions a day recorded after the demonetisation in April 2017, average daily transactions have gone up to 130 in April 2019.What has also contributed to the increase in average usage of ATMs is the fact that banks are issuing more debit cards. In April 2017, at the end of the demonetisation process, the number of debit cards stood at 78 crore. This went up to 88 crore in April 2019. Bankers point out that after ATM regulations were tightened, several banks found it economical to be net issuers and pay the transaction charges of Rs 15 to other banks for use of their ATMs. 70032933 For the week ended June 14, 2019, currency in circulation stood at Rs 22.19 lakh crore—a year-on-year increase of 13%. In April 2017, the amount was Rs 14.17 lakh crore. Given that ATM usage is picking up in Tier II and Tier III towns, where rents are low, the viability of ATMs has gone up.Another development that is expected to boost ATM usage is the activation of the Pradhan Mantri Jan Dhan Yojana accounts. While these accounts were opened three years ago, many of them are now getting funded thanks to the PM-Kisan scheme that credits Rs 2,000 every quarter into the accounts of low-income farmers.Currently, the total number of ATM withdrawals in a month is less than the total number of debit cards in circulation. As against the 88 crore cards, the total monthly withdrawals are 80.9 crore—an average of 0.9 transactions per card. The average monthly withdrawal per account stands at Rs 3,214.According to Mani Mamallan, founder chairman of Electronic Payment and Services, India has a long way to go before ATMs reach saturation level, considering that the average ATM per one lakh adults in India is around 22, which is half the global average. “In China, despite advances in digital payment, there are three more ATMs than in India,” said Mamallan.The parliamentary standing committee on finance has expressed concern that there are just not enough ATMs being installed or added to cater to the rising demand for cash in an expanding economy, even as more and more debit cards are being issued and a large number of Jan Dhan accounts are opened by banks.One of the reasons banks are reluctant to deploy more ATMs is that the RBI has recently made security norms more stringent. These are expected to increase the cost handling cash. According to Mamallan, one way of improving efficiency in cash handling is to install cash-recycling machines instead of ATMs when they come up for replacement. Cash-recycling machines can accept deposits and credit them instantly to the account. Also, the cash is made available instantly for withdrawal.

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